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   The effect of institutional dual holdings on CSR performance; ; Kaspereit, Thomas  et alin Journal of Sustainable Finance and Investment (in press) ABSTRACT This study sheds light on agency conflicts between creditors and shareholders and their effect on a firm's corporate social responsibility (CSR) performance. We find that the presence of ... [more ▼] ABSTRACT This study sheds light on agency conflicts between creditors and shareholders and their effect on a firm's corporate social responsibility (CSR) performance. We find that the presence of institutional investors which simultaneously hold debt and equity claims in the same firm, so-called dual holders, leads to an increase in CSR performance by the firm that is dual-held (the dual holding firm). Using institutional mergers between separate lenders and equity holders as a natural experiment involving the shareholder-creditor conflict, we find that firms which exhibit dual ownership for the first time increase their CSR activities to a greater extent than a matched control group. In line with the previous literature, we interpret our findings as evidence that dual holders internalise agency conflicts. Thus, we find that a reduction in agency conflicts between creditors and shareholders, partly achieved by dual holders, positively affects the CSR activities of dual holdings. [less ▲] Detailed reference viewed: 130 (13 UL)The moderating role of CEO sustainability reporting style in the relationship between sustainability performance, sustainability reporting, and cost of equity; Kaspereit, Thomas ; et alin Journal of Business Economics (2022), 92 This paper explores the role of individual managers in the relationship between sustainability performance, sustainability reporting, and cost of equity. Based on prior research showing that both ... [more ▼] This paper explores the role of individual managers in the relationship between sustainability performance, sustainability reporting, and cost of equity. Based on prior research showing that both sustainability performance and reporting reduce the risk premium, this paper contributes to the literature by acknowledging that the true motives behind a manager’s corporate sustainability engagement are not apparent to investors. Thus, investors need to rely on further information to assess the relationship between sustainability performance and risk. We argue that CEOs’ values and preferences drive their decisions regarding sustainability activities. Thus, their fixed effect on sustainability reporting conveys a signal to investors about the motives behind corporate sustainability engagement and the extent of reporting. In the first step of our empirical analysis, we document that a CEO’s specific reporting style indeed has significant statistical power in explaining a company’s level of sustainability reporting. In the second step, we find that improved sustainability performance is associated with increased cost of equity when the CEO exerts a strong personal influence on sustainability reporting. However, cost of equity declines if the CEO’s influence on the reporting of improved sustainability performance is low. Our results are consistent with the argument that investors interpret CEO’s fixed-effect on sustainability reporting as a signal. That is, for a high CEO fixed-effect, increases in sustainability engagement are conflated with the CEO's self-interested values. In further tests, we show that the signal seems to be particularly important for normative sustainability activities (vs. legal sustainability activities). [less ▲] Detailed reference viewed: 23 (1 UL) |
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